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The NewTechnology EliteHow Great Companies

Optimize Both TechnologyConsumption and

Production

Vinnie Mirchandani

John Wiley & Sons, Inc.


Copyright © 2012 by Vinnie Mirchandani. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Mirchandani, Vinnie.The new technology elite : how great companies optimize both technology consumption and

production / Vinnie Mirchandani.pages cm

Includes index.ISBN 978-1-118-10313-5 (hardback); ISBN 978-1-118-22390-1 (ebk);

ISBN 978-1-118-23727-4 (ebk); ISBN 978-1-118-26217-7 (ebk)1. Technological innovations–Management. 2. Organizational change.

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2011048578

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To Margaret, Rita, Tommy, and Peanuts—the secondopportunity to spend time with you has been so special.


Contents

Preface ixAcknowledgments xxi

Part I The Convergence of Technology Productionand Consumption

Chapter 1 The New Monday Morning Quarterback 3Case Study: UPS—That’s Technology “Amore” 15

Chapter 2 The “Industrialization” of Technology 25Case Study: HP—The Quest for a “10 Out of 10”

Supply Chain 32

Chapter 3 From Amazon to Zipcar: No Industry Untouched 39Case Study: Roosevelt—Innovation Island 49

Chapter 4 Australia to Zanzibar: No Country for Old Products 57Case Study: Estonia’s “Tiigrihupe”—Tiger Leap 66

v


vi C O N T E N T S

Chapter 5 Convergence, Crossover, and Beyond 71Guest Columns: Crossover Executive Perspectives 84Perspective 1: Tony Scott (CIO, Microsoft) 84Perspective 2: Vijay Ravindran (Chief Digital

Officer, The Washington Post Co.) 86

Part II Key Attributes for the New Technology Elite: ThreeEs, Three Ms, Three Ps, and Three Ss

Chapter 6 Elegant: In a World of Flashing 12s 93Case Study: Virgin America—Redefining

Elegance in Flying 103

Chapter 7 Exponential: Leveraging Ecosystems 111Case Study: RIM’s Evolving Ecosystem 119

Chapter 8 Efficient: Amid Massive Technology Waste 123Case Study: Facebook’s Hyperefficient Data Center 133

Chapter 9 Mobile: If It’s Tuesday, It Must Be Xiamen 139Case Study: The Boeing 787 and HCL

Technologies 149

Chapter 10 Maverick: No Rules. Just Right. 155Case Study: Apple—A Thousand “Nos” and Ten

Gutsy “Yeses” 163

Chapter 11 Malleable: Business Model Innovation 173Case Study: Valence Health 186

Chapter 12 Physical: Why Test Driving Is Still Important Evenin a Digital World 193Case Study: Taubman Shopping Centers 205

Chapter 13 Paranoid: But Not Paralyzed 211Case Study: Wireless Aerial Surveillance Platform 220

Chapter 14 Pragmatic: When Attorneys Influence TechnologyEven More than Engineers 225Guest Column: Legal Considerations in

Technology Product Launches—Benjamin Kern 233


Contents vii

Chapter 15 Speedy: In a New Era of Perishability 241Case Study: Corning—The Gorilla® Glass

Rocket Ride 248

Chapter 16 Social: Amid Chatty Humans and Things 255Case Study: Lexmark Genesis—A Printer for

Our Social Times 265

Chapter 17 Sustainable: Mining the Green Gold 271Case Study: Google’s Green Initiatives 282

Part III Outside Influences on the Technology Elite

Chapter 18 Making Regulators More Tech-Elite 291Case Study: 3M’s “Periodic Table” 299

Chapter 19 Society’s Changing View of Technology 305Guest Column: Smart Products Consumers Can

Trust—Professor Mary Cronin 313

Chapter 20 Market Analysts Morphing 317Case Study: Amazon 2010 Shareholder Letter 323

Endgame: “Welcome to the NFL” 327

Notes 333About the Author 367Index 369

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Preface

“This is a song of hope.”That’s how the band Led Zeppelin led off many of its live

performances of what many consider the best ever rock-and-roll hit, “Stairway to Heaven.”

Well, this is a book of hope.I started my technology career in the 1980s when there was pal-

pable excitement about technology providing strategic advantage. Thentechnology, IT in most companies, went into the woodshed for the nexttwo decades. It focused on costs, controls, and compliance. It was notfocused on competitive advantage. In fact, its costs and overruns mademany companies uncompetitive. Over the past 15 years, I have helpedcountless clients focus on cutting IT costs. That’s not much fun.

Starting several years ago, that two-decades-old hope flickered again,and as I wrote my last book, The New Polymath, I saw an amazing amountof technology-enabled innovation being planned.

This book builds on that hope. It comes from cataloging elite tech-nology athletes I have included in the book and how they plan to improvehow we live, work, and play.

How this book came together deserves an explanation.

ix


x P R E F A C E

If you have ever seen a Gartner (the technology research firm) pre-sentation, you know it is the antithesis of the old-school McKinsey (thestrategy consulting firm) presentation, which dictated “no more than sixbullets per slide, six words per bullet.” Gartner slides have dense graph-ics, the handouts have speaker notes in a small font, and the voiceoverallows the speaker a chance to present additional perspectives beyond thegraphs and the notes. You also get to speak uninterrupted at their eventsfor 45 minutes before any questions. My five years there have influencedmy presentation style ever since.

So imagine my challenge at the Ignite conference in Toronto, thenight of September 2, 2010.1 The format allowed each speaker just fiveminutes to present 20 slides. No exceptions. So I had five minutes tosummarize my theme—the 400 pages in the book, The New Polymath.The setting was even more challenging. It was at the historic DrakeHotel, but in a comedy club format. The audience, many in theirtwenties, stood in the dark sipping their drinks—the comedy part camefrom watching the speaker struggle as the projector relentlessly movedslides every 15 seconds.

Through the 20 slides, I tried to convey one basic message to theyoung crowd. There was something very wrong when the Twitter streamof the GE Global Research Center profiled in the book (and namedEdisonsDesk after its famous founder, Thomas Edison) had only 704 fol-lowers up to 3,500 as of December 2011 when Britney Spears had almost6 million. The young are enamored (as I see with my own teenagers)with their iPhones, their Facebook friends, and Twitter streams. Theyshould also be aware that there is plenty of “compound innovation”going on at GE, BASF, BMW, Hospira, and other case studies in thePolymath book that are blending a wide range of infotech, biotech,cleantech, healthtech, and nanotech.

On the flight back home on that trip, I found myself thinkingabout my presentation at Ignite. Interestingly, it was a much youngerme standing in the audience asking two questions. Okay, so I wouldbenefit from learning more about GE and BMW and Hospira, but flipit around—what are those big companies doing to learn about anddevelop products for the younger, tech-savvy consumers like me andothers in the audience? And if Twitter allows Britney, Ashton and abunch of other popular folks to have millions of followers, just how


Preface xi

massive is the Twitter technology infrastructure and that of Facebook andGoogle?

Those two questions became the seed for this book. They led me tofocus on them in the research for my innovation blog2 and in conversa-tions with a number of my consulting clients and industry colleagues.

At the Consumer Electronics Show in Las Vegas in early 2011, I gota clear answer to the first question. While the big excitement during theshow was around the tens of new tablets expected to be rolled out laterin the year, I observed companies from just about every industry—fromWalgreens, the pharmacy chain, to Nike, the shoe company, to Ford, theauto company—were showing off technology-enabled “smart” productsfor the new tech-savvy consumer.

It is a really exciting time for many of these companies. For toolong IT has been an expensive and low-payback back-office investment.Now technology in the companies’ products is allowing them to generaterevenue and growth. Technology is fun and profitable again.

The answers to the second question came in the Apple disclosure thatit had sold 25 million iPads in its first year, that Google had signed over20 million users for its + service in its first month, and that Facebook hadcrossed the 750-million-user threshold (that is more than the populationof most countries in the world). The more I analyzed the operationsof Apple, Google, Facebook, Amazon, Twitter, and eBay—their datacenters, distribution centers, retail stores, application ecosystems, globalsupply chains—the more I was impressed with the “industrialization” oftheir technology. They are considered “consumer” tech, but they havebetter technology on a greater scale than most enterprises.

Traditional technology users are embedding technology in their“smart” products and services thus learning to become technology ven-dors. Technology vendors like Apple are, in reverse, running retail op-erations better than Nordstrom. eBay’s PayPal unit is running betteroperations than many banks. Amazon is running logistics better thanmany distributors. Google is running data centers far more efficientlythan IBM’s or EDS’s. They are the new best practice leaders.

It hit me that the traditional distinction between technology user andvendor is outdated. The baseball term “switch-hitter” came to mind.Not just in baseball—in soccer, athletes who can fire rockets with eitherleg are valued. Same with many other sports—ambidexterity is a much


xii P R E F A C E

sought-after attribute. Similarly you have to learn to be comfortableon both sides of the plate, to be ambidextrous in the development andconsumption of technology.

Beyond ambidexterity, though, truly elite athletes contribute inother ways. Baseball switch-hitters are more valuable if they are alsogood fielders, base stealers, and have strong, accurate throwing arms.The elite are multi-dimensional—they play good defense and offense.

This book is about elite companies—the technology version of GoldGlove fielders and stolen base leaders. And the great news is the moreI researched, the more I found many of them. Across industries. Acrosscountries.

In this book I have tried to bring out that diversity. There are morethan 100 examples and interviews from New Zealand to South Korea,from farming to municipal services. The 17 case studies and four guestcolumns bring the elite attributes out in detail.

Flow of the Book

The book is organized in three parts.Part I sets the stage for the technology “buyor”—companies that are

becoming efficient buyers and vendors of technology. It also explores thelandscape for such behavior across varied industries and geographies.

Part II explores 12 attributes of becoming what I call the technologyelite. It is no longer about being able to talk geeky terms like HTML5 orSQL Injection or cloud architectures. It is about product design elegance,about physical presence in strategic retail locations, about ecosystems ofdevelopers and thriving App Stores. It is about being paranoid in theworld of groups like LulzSec and Anonymous. It is about being pragmaticin a world where attorneys are even more influential than engineers. Itis about being able to fly to Xiamen or Xanadu at a moment’s notice.

Part III is focused on how regulators, Wall Street and other marketanalysts, and society in general are learning to cope with the tsunamiof technology innovation that is headed our way. The technology elitewe catalog are being sensitive to these external influences—and prepar-ing for the world where these influencers themselves become moretech-savvy.


Preface xiii

Let’s go through each part and chapter individually.

Part I: The Convergence of Technology Productionand Consumption

Chapter 1: The New Monday Morning Quarterback. Traditionally classifiedas technology “buyers” and “user organizations,” many companies arelearning to embed technology in their products and themselves becometechnology “vendors.” They are learning to sell to the new tech-savvyconsumer who is ready for new form/factors in every product, includingshirts, pens, cars, and bulbs. Other companies like 3M and GE would beoffended if you mentioned they were “learning” to become technologyvendors. They have long viewed themselves as technology vendors evenif Silicon Valley may disagree. Then there are companies like UPS,which calls itself “about half a transportation company, half a technologycompany.” The case study on UPS details its technology innovations inDIADs, its franchise stores, its aviation innovations, and much more.

Chapter 2: The “Industrialization” of Technology. Apple, Amazon, Google,eBay, Facebook, Zynga, and Twitter are mostly focused on consumer-facing technology. Under the covers, however, they show the powerof “industrialization of technology” as they scale to massive numbers—25 million iPads in Year 1 and 20 million users for Google+ in its firstmonth of introduction. These are technology vendors emulating bestpractices from varied industries, even competing with them and tak-ing them to new levels. They tend to focus on each other. Amazon,Google, and Apple are all vying for streaming music service. Ama-zon competes with eBay for online commerce, Google competes withTwitter, Facebook, and Zynga for social impact. Google competes withApple and PayPal/eBay for mobile dominance. In the process, though,they are raising the bar for established technology vendors like IBM andMicrosoft and for corporate IT. The case study in this chapter focuseson HP’s complex global supply chain and how it adjusts to countlesshiccups caused by the Japanese tsunami, the Iceland volcano, and also tolonger-term shifts.

Chapter 3: Amazon to Zipcar: No Industry Untouched. Either out of para-noia, promise, or “phoenix thinking,” industry after industry is thinking


xiv P R E F A C E

about next-generation, technology-influenced products and services. Itis almost impossible to find an industry with what Warren Buffett, thelegendary investor, calls “unbreachable moats,” where technology’s in-fluence is not felt. The case study associated with this chapter is tinyRoosevelt Island in the East River in New York and its amazinglyambitious vision of leveraging technology like smart parking and a next-generation ferry service.

Chapter 4: Australia to Zanzibar: No Country for Old Products. In some wayswe live in a flat world where Apple, Google, and Facebook have becomeour common language. On the other hand, there are so many uniquenuances that it would be naıve to assume global branding and universalproduct versions can be successful for all products. The different ratesof technological evolution also offer significant policy opportunities asstates, provinces, and nations compete for jobs and investments. Thecase study for this chapter focuses on the small Baltic country of Estoniaand its remarkable digital “Tiger Leap” and rapid evolution away fromdecades of communist stagnation.

Chapter 5: Convergence, Crossover, and Beyond. Chapter 1 showed tradi-tional technology consumers who are learning to become technologyvendors. In Chapter 2, we saw technology vendors who are deliveringscale and best practices from a variety of technology buyer industries.Just as in baseball, where only 15 percent of players are switch-hitters,the ambidextrous technologist who is good at both technology pro-duction and technology consumption is an elusive species. We needthem in the form of “crossover” executives who bring experiences fromboth technology vendor and user organizations. We present guest col-umn perspectives of two such crossover executives: Tony Scott, CIOat Microsoft who got there after stints at Disney and GM, and VijayRavindran, Chief Digital Officer at the Washington Post Co., who wasat Amazon in its formative stages.

Part II: Key Attributes for the New Technology Elite: Three Es,Three Ms, Three Ps, and Three Ss

Chapter 6: Elegant: In a World of Flashing 12s. We are seeing a revolution indesign in devices, in our software, and in our architecture. If you aspire


Preface xv

to be one of the technology elite, you have to put industrial design highon your agenda. In the case study associated with this chapter, we seehow Virgin America, using good design and technology, is redefiningthe airline industry, an industry that in some studies scores lower incustomer satisfaction than the IRS.

Chapter 7: Exponential: Leveraging Ecosystems. A thick application cataloghas always been important for a technology platform’s success goingback to IBM’s huge success with the AS/400 in the 1980s. It’s becomedramatically more important in the past few years. In particular, Appleand Google have shown their App Stores can scale to hundreds of thou-sands of applications and billions of downloads. In the case study for thischapter, we analyze how RIM (the BlackBerry company) has had toreact to this new world.

Chapter 8: Efficient: Amid Massive Technology Waste. There is massive wastein technology: printer ink at $5,000 a gallon, roaming charges of $4 aminute from some countries, calls to application contact centers thatamortize to over $10,000 each. The technology elite don’t just focuson innovation to improve the top line; they are also intensely focusedon efficiencies. In this chapter’s case study, we outline the countlessefficiencies Facebook has delivered in its Prineville data center whichopened in 2011. In a technology world that is traditionally secretive,Facebook surprisingly shared details of much of the data center as partof its Open Compute Initiative.

Chapter 9: Mobile: If It’s Tuesday, It Must Be Xiamen. To become a techelite you have to be a Marco Polo and a Gulliver—bravely exploringa fast-changing world. Suppliers and captive units in exotic locationscan provide unique competitive advantage. They can also make muchmore complicated the supply chain and product development cycles.The case study here shows how Boeing learned from a global supplychain for its new 787. The experience was painful with many delays, butalso delivered an amazing number of innovations. The case study furtherdescribes how Boeing used HCL Technologies as a glue to bond manyof those widespread elements.


xvi P R E F A C E

Chapter 10: Maverick: No Rules. Just Right. In technology, more than anysector, being a maverick is tolerated, even encouraged. Disruption isnot a dirty word in technology. Tech elites understand, though, being amaverick does not mean no rules. It means defining your own rules anddiscipline to support your position. The case study here is Apple, whichhas shown time and time again how it breaks others’ rules, while definingnew ones for itself and its competitors. We look at 10 gutsy moves Applehas made over the last decade and how it plays Maverick—the characterTom Cruise played in the movie Top Gun.

Chapter 11: Malleable: Business Model Innovations. Technology-elite com-panies like Apple and Amazon have shown that creativity in pricing andefficiency in costing are as important as good product design and logis-tics. And not just pricing around their own products but around music,books, and telephone service. Technology is allowing every industry toexperiment with new business models like “as a service,” and “fromthe bottom of the pyramid.” In the case study, we see how a youngcompany, Valence Health, using sophisticated analytical technology anda new business model aimed at providers versus payers of healthcare, isbuilding a viable venture.

Chapter 12: Physical: Why Test Driving Is Still Important Even in a Digital World.We would not buy a car without a test drive and somehow we seem tohave forgotten that physical, tactile experience continues to be importantwith technology products. The technology elite know better and alsoknow you need knowledgeable, friendly customer service to go with it.The case study for this chapter is Taubman Shopping Centers, which hasthrived in the last decade with Apple, Bose, and other technology storesand its own digital infrastructure, when brick and mortar was supposedto be dying.

Chapter 13: Paranoid: But Not Paralyzed. Teardowns, jailbreaks, and root-ings are almost a badge of honor in technology world. They are tame,however, compared to the malicious hacking and espionage technologycompanies are increasingly subjected to. In such a climate, it helps to beparanoid. The case study here profiles the Wireless Aerial SurveillancePlatform, a drone that can hack into networks and eavesdrop on mobile


Preface xvii

conversations and shows other reasons to be vigilant. Of course, beingparanoid does not mean being paralyzed. The technology elite just lookat it as a cost of doing business. Life has to go on.

Chapter 14: Pragmatic: When Attorneys Influence Technology Even More thanEngineers. If the hacking and the espionage described in the previouschapter do not paralyze companies looking to build smart products,the spreading lawsuits surely can. In many ways, the technology eliteknow that good lawyers are just as important as engineers in technology.They can help enterprises to be pragmatic, even when surrounded by“rattlesnakes.” Benjamin Kern, an attorney with the firm of McGuire-Woods, also has an interesting personal background as a technologyentrepreneur. He provides, in a guest column, some of that pragmaticadvice on the tricky world of fuzzy patents and uneven intellectualproperty (IP) protection with global supply chains.

Chapter 15: Speedy: In a New Era of Perishability. A key trait of the newtechnology elite is their speed—in product innovation, in anticipatingchanges in competitive landscapes, in managing volatility in demandforecasting and supply chains, and even in their back office. In the casestudy we look at the Corning Gorilla Glass product, which defines thenew clockspeed. It has been adopted in over 400 electronic products inless than three years.

Chapter 16: Social: Amid Chatty Humans and Things. The technology eliteknow how we live in a world of chatter, human and nonhuman. Learningto interpret that chatter and to magnify it via social savvy is no longera “nice to have.” Not just your employees, your products also need tobe “social.” In the case study we look at a socially savvy product—theLexmark Genesis—and the social media launch it enjoyed.

Chapter 17: Sustainable: Mining the Green Gold. To be considered a technol-ogy elite, it is increasingly expected that you put sustainability high onyour self-evaluation scorecard. The definition of sustainability, however,gets more ambitious by the day as we grapple with “conflict minerals”and the ethics of becoming dependent on nonrenewable rare earths in


xviii P R E F A C E

so many of our technology products. The case study looks at Google’sbreathtaking array of green initiatives.

Part III: Outside Influences on the Technology Elite

Chapter 18: Regulators and Technology. Many of the earlier chapters showsavvy government and municipal technology groups. In general, how-ever, regulation of technology lags the fast-changing markets it is sup-posed to watch over. Regulators are themselves being challenged tobecome technologically elite. The case study focuses on how 3M usesits “Periodic Table” to summarize its 46 technology platforms (that getmanifested in over 55,000 of its products) to communicate with marketwatchers. It manifests what regulators will increasingly have to becomesavvy about.

Chapter 19: Society’s Changing View of Technology. While we can build tech-nologically elite enterprises, we cannot mandate a technologically elitesociety. The reality is it is “unelite” and uneven. So we need a new setof professionals to prepare society for the avalanche of coming technolo-gies. In a guest column, Prof. Mary Cronin of Boston College focuseson another challenge we will face in the next few years. She writesabout the continuous, automatic, and invisible tracking of individuals bymultiple smart devices and the related explosion of personal data and thenew privacy challenges society will have to address.

Chapter 20: Market Watchers Morphing. As the technology elite likeAmazon, 3M, HP, and UPS pioneer new ways of communicating tofinancial and other market analysts, they raise the bar for those analysts.They also create new expectations for every other company they arebenchmarked against. We present the text of a groundbreaking letterJeff Bezos, CEO of Amazon, sent to his shareholders, which is full oftechnology jargon. It does come with this reassurance: “Now, if theeyes of some shareowners dutifully reading this letter are by this pointglazing over, I will awaken you by pointing out that, in my opinion,these techniques are not idly pursued—they lead directly to free cashflow.”


Preface xix

And finally, we end with a summary chapter that brings together manyof the trends we have discussed in the first 20.

Endgame: “Welcome to the NFL.” This chapter summarizes the 12 eliteattributes we discussed in Part II. It also profiles the impact of moredemanding regulators and market watchers and changing societal ex-pectations we discussed in Part III.

What Got Left Out?

I could have profiled twice as many guest columns and detailed casestudies. I could have written about all kinds of advances in biotech andnanotech since my last book. What about peers and competitors ofcompanies profiled in this book—are they sitting still or innovating ontheir own?

It’s like making a Hollywood movie. Plenty gets left behind in the“director’s cut.” In my case, some of those “30 minutes” edited outcan be found on my two blogs. Those are living, breathing documentscompared to a printed book that can be only a snapshot.

Of course, I would welcome reader comments and conversations. Iexpect a few will disagree with me, for including the HP supply chainexample when it announced, then reversed course within a matter ofweeks, that it was de-emphasizing its PC business. In my opinion it is agood example of the acrobatics needed in the dynamic technology mar-ketplace. Others might disagree with my profiling RIM with its work-in-progress ecosystem as it tries to catch up to Apple’s and Google’s. Orthe much-delayed Boeing 787. In my opinion, the 787 supply chain andthe passenger comfort innovations it incorporates deserve the ink. So, Ilook forward to the feedback and the discussions.

In the meantime, as “Stairway” advises, there’s time to change theroad you are on. It’s a good time to emulate the technology elite. Yes,this is a book of that hope.

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Acknowledgments

As I reviewed a late edit of this book, I felt like I was watching ESPN’sX Games, which focuses on extreme sports. The pages that followare filled with many technology athletes and their acrobatics. So, let

me start by thanking the “athletes” themselves. The many intervieweesand guest columnists in the book spent hours talking to me, wroteabout unique nuances in their businesses and provided their innovativeperspectives on technology.

The comparison to the Games also reminded me that hundreds ofcoordinators have a hand, behind the scenes, in organizing such an event.

There were many like Barry Dayton at 3M, Bryan Majewski at BakerTilly, Sarah Pakyala at Corning, Alan Alper at Cognizant, Alison Bolenat SAS, Tiffany Anderson at Tibco, Ramana Rao at The WashingtonPost Company, and Lacey Higgins at Workday, who coordinated manyof the interviews in the book. Jim Spath at Stanley Black & Deckerhelped with a critical review of the materials. They may not show up inthe book, but these and many others played a significant role. To them,also my heartfelt thanks.

It’s the same with my publisher, John Wiley & Sons. JohnDeRemigis, and his entire editing and marketing team, worked marvels

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xxii A C K N O W L E D G M E N T S

through several versions of the manuscript. A book on technology,business, society, and public policy stretches the dictionary in manydirections.

The biggest thanks go to my wife, Margaret. She encouraged me towrite the book. I would have waited a few more years after The NewPolymath. She calmly helped me navigate the ups and downs commonin such an undertaking.

She is the unheralded Chief Organizer of the event. Or her behalf,and all the “athletes,” I invite you to enjoy the “Games”!

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Part I

The Convergence ofTechnology Production

and Consumption


Chapter 1

The New MondayMorning Quarterback

For a week every January, Las Vegas replaces Silicon Valley as thetechnology hub of the world. The International Consumer Elec-tronics Show (CES) attracts 150,000 exhibitors, attendees, govern-

ment officials, investors, and fans from around the world.1 They cometo see an orgy of technologies at the show that even outshines Vegas’sother outlandish attractions.

The show has traditionally been a harbinger of technology andsocietal trends with the products that are launched there: 1981 sawthe introduction of the camcorder, 1991 the Interactive CD, 2001 theMicrosoft Xbox. Each year in between and after there have been otherspectacular announcements.

The year 2011 was no different. It will likely go down as the “Year ofthe Tablet.” Over 100 options from Motorola, Dell, Samsung, Toshiba,and others competed for attention at CES.2 They were all hoping tomatch the phenomenal launch of the Apple iPad a few months prior.

3


4 T H E N E W T E C H N O L O G Y E L I T E

If the 7,000 journalists, bloggers, and analysts at the show were not ex-hausted from analyzing the varied tablet form/factors and new features,they were chasing down rumors at the show about whether Apple wasabout to launch a Verizon version of the iPhone. (The rumor was laterconfirmed as Apple provided an option to the AT&T network that waspreviously an exclusive for the iPhone in the U.S. market.)

Lost in the excitement about iPad killers and iPhone rumors atthe show was an even more significant nugget—the list of exhibitorsincluded companies from just about every non-technology verticalindustry.

There was Walgreens—yes, the pharmacy chain—showing off itsRefill application that allows you to scan the bar code from a previousprescription using a mobile phone, transmit it, and get a text messageto go pick it up at a nearby store. At many of its stores, you could usedrive-through lanes and related technologies.

Whirlpool showcased its Duet washer/dryers with LCD screens andvarious laundry apps designed to give users advice on stain removal andother laundry questions.

Nike introduced a GPS-enabled Sportwatch developed in collabo-ration with the navigation vendor Tom Tom.

Ingersoll Rand showed off tech innovations around its Schlage homesecurity and Trane thermostat products.

Ford chose to unveil its all-electric Focus at the CES show ratherthan at the traditional car launch showplace, the Detroit Auto Show,which was only a week later. In a later guest column for Fortune, BillFord, Executive Chairman, wrote, “Many of Ford’s suppliers are nownontraditional suppliers like Microsoft and retailers such as Best Buy,which are helping provide the charging and IT infrastructure for thisnew form of mobility.”3

Not to be outdone by Ford, GM showcased a retail, boxed version ofan OnStar-equipped rearview mirror. This opened up OnStar to nearlyany vehicle—from a Ford to a Toyota. Its features such as automaticcrash response, turn-by-turn navigation, stolen vehicle location assis-tance, emergency and roadside services, and hands-free calling werelong a reason to buy a GM car with the built-in OnStar.4

3M showed off its Patterned Transparent Conductors (PTC). Usingtechnology that enables a high degree of pattern control of conductive


The New Monday Morning Quarterback 5

materials on flexible substrates, 3M is able to produce conductive tracesdown to two microns wide or less to support projected capacitive touchsensing. This capability supports the development of new touch-enabledconsumer electronic devices. PTC is able to decrease the amount ofspace needed on the device bezel. Using silver, it offers a significantlylowered resistance that allows sensors to support fast response times,even in tablet sizes.

What’s going on here? These companies live far from Silicon Valleyand are known as retailers and auto companies. Why are they competingfor booth space and geek attention with technology vendors?

The Monday Morning Letdown

What’s going on, in Malcolm Frank’s words, is the “Sunday Night versusMonday Morning phenomenon.” Frank, SVP of Strategy and Marketingat Cognizant, is regaling an audience of CIOs at a customer conferencein Orlando. The slide shows a picture of Rumors—the Fleetwood Mac1977 album. His audience giggles as his voiceover tells the cynicism ofhis young sons as they happened upon his record collection and he triedto justify why we bought complete albums back then, not just individualMP3 tunes. The reaction of his sons only accentuates what he is seeingat work.

At Cognizant and in other outsourcing firms he has previouslyworked at, Frank has always been surrounded by young workers—atheme common in technology services. He sees their Monday morningreaction—no Facebook listing of colleagues? No iPads? No thumbdrives allowed? This is pretty striking after Sunday night at home withHDTV, Flip video cameras, Microsoft Kinects, Bose audio gear, andApple retina displays.

Yes, it is a trend called “consumerization of technology,” and Applegets plenty of credit for it.

Of course, it was not just Apple. Microsoft introduced the Xbox in2001; HP announced more of a focus on entertainment with its MediaCenter PC in 2002; Skype arrived in 2003 and would change callinghabits for millions around the world; the massively multiplayer game


6 T H E N E W T E C H N O L O G Y E L I T E

World of Warcraft disrupted our lives in 2004; and in 2005, withthe Sony Rootkit issue, consumers started to hear about intellectualproperty issues previously limited to corporate corridors. Since 2005,Google’s growing Web and mobile presence has introduced consumersto analytical power that big companies paid bucketloads of money for.The Apple iPhone—considered one of the most successful productlaunches ever—and all kinds of GPS, gaming, entertainment, and othergadgets have only accelerated the consumerization trend. The Wiireshaped our expectations of computer interfaces; the Kindle, ourexpectations of books. Electronic House magazine has celebrated houseswith all kinds of home theaters and elaborate security systems. eBayhas built a cottage industry of individuals doing business from home.JetBlue has moved call reservations to agents working from home.SOHO is no longer just a Manhattan neighborhood but a growingrevenue category for technology companies as the acronym for smalloffice, home office.5

TAF—The Technologically Advanced Family

Matt Murphy and Mary Meeker of the venture capital firm KleinerPerkins brought out the global consumer technology proliferation num-bers vividly in a presentation they gave in February 2011.6 They include18.8 trillion mobile minutes, 972 million Google users, 10 billion Appleapplications downloaded, and 130 million active Zynga users.

We are just getting started. Globally, only 14 percent of the world ison a 3G or faster network, so the market for smart phones and mobileapplications is still embryonic.

Then there is the potential demographic stretch. Mark Zuckerberg,CEO of Facebook, thinks the age requirement of 13 is too restrictive forusers of his social network. He says, “My philosophy is that for educationyou need to start at a really, really young age.”7 He does have a point.Many families get even younger children mobile phones, encouragedby billing plans that cost as little as $9.99 a month for the extra line.Nintendo has a workaround for kids under 13. Their policy states, “Forchildren under the age of 13, we have developed a Family Accountsystem. In order for a child under 13 to have a Club Nintendo account,the child’s parent or guardian must register for Club Nintendo and create

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